RESTON, Va., Aug. 9, 2017 /PRNewswire/ -- NII Holdings,
Inc. (NASDAQ: NIHD) today announced its financial results for the
second quarter of 2017. For the quarter, the Company generated
consolidated operating revenues of $225
million, a consolidated operating loss of $69 million and consolidated adjusted OIBDA loss
of $5 million. The Company's
consolidated adjusted OIBDA excludes the impact of non-cash asset
impairments, restructuring charges and other unusual items. Capital
expenditures were $9 million for the
quarter. The Company reported 29,000 3G net subscriber losses in
the quarter and 104,000 subscriber losses on the Company's iDEN
network.
"We significantly improved our operational free cash flow this
quarter, which resulted from our continued focus on preserving our
liquidity," said Roberto Rittes, Nextel Brazil's Chief Executive
Officer. "Our revenues and adjusted OIBDA for this quarter were
impacted by the continued decline in our iDEN subscriber base. In
addition, during the quarter, other operators introduced more
aggressive rate plans that affected our subscriber growth and
churn. In response to this development, in August, we introduced
new rate plans that we believe will compete well against the new
offers in the market."
Nextel Brazil's average monthly service revenue per subscriber
(ARPU) for the second quarter of 2017 was $19, relatively flat on a reported basis, and a
6% decrease on a constant currency basis, compared to the same
quarter last year. Nextel Brazil's average monthly churn rate for
the second quarter of 2017 was 3.95%, a 4 basis point decrease
compared to the same quarter last year. Nextel Brazil's cost per
gross addition (CPGA) was $103 for
the second quarter of 2017, a $4
increase on a reported basis, and a 5% decrease on a constant
currency basis, compared to the same quarter last year. Nextel
Brazil's cash cost per user (CCPU) was $18 for the second quarter of 2017, a
$2 increase on a reported basis, and
a 2% increase on a constant currency basis, compared to the same
quarter last year.
At quarter-end, the Company's sources of funding included
$282 million of unrestricted cash and
short-term investments, $114 million
of cash held in escrow to secure indemnification obligations in
connection with the sale of Nextel Mexico and $49 million in cash pledged as collateral to
secure certain performance bonds in Brazil.
The Company reported net cash used in operating activities of
$1 million for the second quarter,
resulting in net cash used in operating activities of $46 million for the six months ended June 30, 2017. In light of these results, the
Company updated its guidance for operational free cash burn for the
full year 2017 from a range of $200 to $250
million to a range of $150 to $200
million.
In August, the Company announced that the lenders of Nextel
Brazil's local bank loans have agreed to extend their standstill
agreements with Nextel Brazil to October 31,
2017, during which time no amortization payments will be
required with respect to the related loans. In addition, upon
making the next semi-annual principal payment to the lender of
Nextel Brazil's equipment financing facility, which is due in
August, Nextel Brazil agreed to pay the lenders of its local bank
loans the principal payments that were deferred under the original
standstill agreement.
The Company also announced that it reached preliminary
non-binding agreements with its bank lenders on the key terms for
loan amendments. Among other changes, these terms provide for the
deferral of principal payments until the end of 2021 and a holiday
for financial covenant compliance until June
30, 2020. In exchange for these changes, Nextel Brazil would
grant additional security interests to the bank lenders in the form
of preferential rights to amounts held in certain of Nextel
Brazil's bank accounts, among other things. These terms must be
finalized in formal amendment agreements, and the final amendments
remain subject to review and approval by the banks. There is no
guarantee that the Company will be able to finalize these
amendments on acceptable terms or at all. The Company believes that
it remains on track to complete the process in time for AINMT to
exercise its option to invest an additional $150 million should AINMT choose to do so.
"We are pleased with the progress we have made and the support
we have received from all of our lenders to amend our local
agreements, which is a key priority for us," said Dan Freiman, the Company's Chief Financial
Officer. "With the closing of AINMT's first investment of
$50 million, we are focused on
completing these amendments and meeting all of the other conditions
for AINMT's second investment of $150
million, if AINMT chooses to execute its option, which will
enable us to pursue a new growth strategy for Nextel Brazil going
forward."
Additional details regarding the Company's results, including a
more detailed explanation on local currency operating metrics, are
included in the Company's Quarterly Report on Form 10-Q for the
three months ended June 30, 2017 that
was filed with the Securities and Exchange Commission today.
Additional operational and financial details, including a quarterly
earnings presentation, are also available under the Company's
Investor Relations link at www.nii.com.
In addition to the financial results prepared in accordance with
accounting principles generally accepted in the United States (GAAP) provided throughout
this press release and in the attached financial tables, NII
Holdings has presented consolidated adjusted OIBDA, as well as
Nextel Brazil's ARPU, CCPU, and CPGA. These measures are non-GAAP
financial measures and should be considered in addition to, but not
as substitutes for, the information prepared in accordance with
GAAP. Reconciliations from GAAP results to these non-GAAP financial
measures are provided in the notes to the attached financial
tables. To view these and other reconciliations of non-GAAP
financial measures that the Company uses, visit the investor
relations link at www.nii.com.
About NII Holdings, Inc.
NII Holdings, Inc., a
publicly held company based in Reston,
Virginia, is a provider of differentiated mobile
communication services for businesses and high value consumers in
Brazil. NII Holdings, operating
under the Nextel brand, offers fully integrated wireless
communication tools with digital cellular voice services, data
services and wireless Internet access. Visit the Company's website
at www.nii.com.
Nextel, the Nextel logo and Nextel Direct Connect are
trademarks and/or service marks of Nextel Communications,
Inc.
Visit NII Holdings' news room for news and to access our
markets' news centers: nii.com/newsroom.
Safe Harbor Statement
"Safe Harbor" Statement
under the Private Securities Litigation Reform Act of 1995.
This news release includes "forward-looking statements" within the
meaning of the securities laws. The statements in this news release
regarding the business and economic outlook, future performance,
modifications to loan agreements, the completion of AINMT's second
investment and guidance, as well as other statements that are not
historical facts, are forward-looking statements. Forward-looking
statements are estimates and projections reflecting management's
judgment based on currently available information and involve a
number of risks and uncertainties that could cause actual results
to differ materially from those suggested by the forward-looking
statements. With respect to these forward-looking statements,
management has made assumptions regarding, among other things, the
Company's ability to fund the business and meet its business plans,
customer growth and retention, pricing, network usage, operating
costs, the timing of various events, the economic and regulatory
environment and the foreign currency exchange rates that will
prevail during the remainder of 2017. Future performance cannot be
assured and actual results may differ materially from those in the
forward-looking statements. Some factors that could cause actual
results to differ include the risks and uncertainties relating to:
the impact of liquidity constraints, including the inability to
access escrowed and pledged funds when expected, our ability to
reach agreement with lenders on amendments to the terms of our
financing arrangements, a decision by AINMT not to exercise its
option, failing to meet the closing conditions necessary to
complete AINMT's investment, the impact of more intense competitive
conditions and changes in economic conditions in Brazil, the performance of the Company's
networks, the Company's ability to provide services that customers
want or need, the ability of the Company to continue as a going
concern, the Company's ability to execute its business plan,
and the additional risks and uncertainties that are described in
NII Holdings' Annual Report on Form 10-K for the year ended
December 31, 2016 and the Quarterly
Report on Form 10-Q for the period ended June 30, 2017, as well as in other reports filed
from time to time by NII Holdings with the Securities and Exchange
Commission. This press release speaks only as of its date, and NII
Holdings disclaims any duty to update the information herein.
NII HOLDINGS, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2017 AND 2016
|
(in millions,
except per share amounts)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Operating
revenues
Service and
other revenues
|
$
|
220.1
|
|
|
$
|
243.1
|
|
|
$
|
463.6
|
|
|
$
|
463.7
|
|
Handset and
accessory revenues
|
5.0
|
|
|
6.1
|
|
|
12.5
|
|
|
12.0
|
|
|
225.1
|
|
|
249.2
|
|
|
476.1
|
|
|
475.7
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included below)
|
87.9
|
|
|
81.9
|
|
|
190.6
|
|
|
171.9
|
|
Cost of
handsets and accessories
|
13.0
|
|
|
8.9
|
|
|
21.7
|
|
|
20.0
|
|
Selling,
general and administrative
|
129.6
|
|
|
135.9
|
|
|
264.1
|
|
|
269.3
|
|
Impairment,
restructuring and other charges
|
54.2
|
|
|
10.6
|
|
|
126.2
|
|
|
16.5
|
|
Depreciation
|
5.7
|
|
|
29.7
|
|
|
14.6
|
|
|
59.8
|
|
Amortization
|
3.6
|
|
|
11.0
|
|
|
7.7
|
|
|
21.0
|
|
|
294.0
|
|
|
278.0
|
|
|
624.9
|
|
|
558.5
|
|
Operating
loss
|
(68.9)
|
|
|
(28.8)
|
|
|
(148.8)
|
|
|
(82.8)
|
|
Other (expense)
income
Interest
expense, net
|
(29.9)
|
|
|
(27.2)
|
|
|
(61.4)
|
|
|
(52.4)
|
|
Interest
income
|
7.8
|
|
|
10.8
|
|
|
16.9
|
|
|
20.5
|
|
Foreign
currency transaction (losses) gains, net
|
(13.4)
|
|
|
43.4
|
|
|
(2.0)
|
|
|
83.0
|
|
Other income
(expense), net
|
10.7
|
|
|
(2.4)
|
|
|
8.9
|
|
|
(4.9)
|
|
|
(24.8)
|
|
|
24.6
|
|
|
(37.6)
|
|
|
46.2
|
|
Loss from
continuing operations before reorganization
items and income tax provision
|
(93.7)
|
|
|
(4.2)
|
|
|
(186.4)
|
|
|
(36.6)
|
|
Reorganization
items
|
0.4
|
|
|
(0.2)
|
|
|
0.4
|
|
|
(0.6)
|
|
Income tax benefit
(provision)
|
5.8
|
|
|
(0.4)
|
|
|
5.8
|
|
|
(0.4)
|
|
Net loss from
continuing operations
|
(87.5)
|
|
|
(4.8)
|
|
|
(180.2)
|
|
|
(37.6)
|
|
Net income (loss)
from discontinued operations, net of
income taxes
|
2.7
|
|
|
(5.1)
|
|
|
2.7
|
|
|
(8.9)
|
|
Net
loss
|
$
|
(84.8)
|
|
|
$
|
(9.9)
|
|
|
$
|
(177.5)
|
|
|
$
|
(46.5)
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations per common share,
basic and diluted
|
$
|
(0.87)
|
|
|
$
|
(0.05)
|
|
|
$
|
(1.80)
|
|
|
$
|
(0.37)
|
|
Net income (loss)
from discontinued operations per common
share, basic and diluted
|
0.02
|
|
|
(0.05)
|
|
|
0.03
|
|
|
(0.09)
|
|
Net loss per
common share, basic and diluted
|
$
|
(0.85)
|
|
|
$
|
(0.10)
|
|
|
$
|
(1.77)
|
|
|
$
|
(0.46)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
basic and diluted
|
100.3
|
|
|
100.0
|
|
|
100.3
|
|
|
100.0
|
|
CONSOLIDATED
BALANCE SHEETS
|
(in millions,
except par values)
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
|
|
|
ASSETS
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
219.6
|
|
|
$
|
257.4
|
|
Short-term
investments
|
62.8
|
|
|
73.9
|
|
Accounts receivable,
net of allowance for doubtful accounts of $56.5 and
$54.2
|
138.1
|
|
|
153.8
|
|
Handset and accessory
inventory
|
3.3
|
|
|
8.3
|
|
Prepaid expenses and
other
|
234.9
|
|
|
280.1
|
|
Total current
assets
|
658.7
|
|
|
773.5
|
|
Property, plant
and equipment, net
|
104.8
|
|
|
129.5
|
|
Intangible assets,
net
|
196.8
|
|
|
243.7
|
|
Other
assets
|
237.7
|
|
|
271.8
|
|
Total
assets
|
$
|
1,198.0
|
|
|
$
|
1,418.5
|
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
54.6
|
|
|
$
|
69.2
|
|
Accrued expenses and
other
|
240.4
|
|
|
271.9
|
|
Deferred
revenues
|
7.6
|
|
|
11.6
|
|
Current portion of
long-term debt
|
495.9
|
|
|
540.5
|
|
Total current
liabilities
|
798.5
|
|
|
893.2
|
|
Long-term
debt
|
208.3
|
|
|
215.8
|
|
Other long-term
liabilities
|
194.8
|
|
|
143.5
|
|
Total
liabilities
|
1,201.6
|
|
|
1,252.5
|
|
Stockholders'
equity
|
|
|
|
Undesignated
preferred stock, par value $0.001, 10.0 shares authorized, no
shares
issued or
outstanding
|
—
|
|
|
—
|
|
Common stock, par
value $0.001, 140.0 shares authorized, 100.4 shares issued
and
outstanding — 2017, 100.3 shares issued and
outstanding — 2016
|
0.1
|
|
|
0.1
|
|
Paid-in
capital
|
2,079.6
|
|
|
2,076.6
|
|
Accumulated
deficit
|
(2,012.2)
|
|
|
(1,834.8)
|
|
Accumulated other
comprehensive loss
|
(71.1)
|
|
|
(75.9)
|
|
Total stockholders'
(deficit) equity
|
(3.6)
|
|
|
166.0
|
|
Total liabilities and
stockholders' (deficit) equity
|
$
|
1,198.0
|
|
|
$
|
1,418.5
|
|
CONSOLIDATED CASH
FLOW DATA
|
(in
millions)
|
|
|
Six Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
|
|
|
Cash and
cash equivalents, beginning of period
|
$
|
257.4
|
|
|
$
|
342.2
|
|
Net cash (used in)
provided by operating activities
|
(46.4)
|
|
|
8.0
|
|
Net cash provided by
investing activities
|
52.7
|
|
|
17.0
|
|
Net cash used in
financing activities
|
(44.3)
|
|
|
(28.5)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
0.2
|
|
|
(0.6)
|
|
Cash and cash
equivalents, end of period
|
$
|
219.6
|
|
|
$
|
338.1
|
|
NII HOLDINGS, INC.
AND SUBSIDIARIES
|
OPERATING RESULTS
AND METRICS
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (1)
|
(UNAUDITED)
|
|
Nextel
Brazil
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Service and other
revenues
|
$
|
220.1
|
|
|
$
|
243.1
|
|
|
$
|
463.6
|
|
|
$
|
463.6
|
|
|
|
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
5.0
|
|
|
6.1
|
|
|
12.5
|
|
|
12.0
|
|
|
Cost of handsets and
accessories
|
(13.0)
|
|
|
(8.9)
|
|
|
(21.7)
|
|
|
(20.0)
|
|
|
Handset and accessory
net subsidy
|
(8.0)
|
|
|
(2.8)
|
|
|
(9.2)
|
|
|
(8.0)
|
|
|
Cost of service
(exclusive of depreciation and amortization)
|
(87.9)
|
|
|
(81.9)
|
|
|
(190.6)
|
|
|
(171.9)
|
|
|
Selling, general and
administrative
|
(121.1)
|
|
|
(126.1)
|
|
|
(248.3)
|
|
|
(247.7)
|
|
|
Segment
earnings
|
3.1
|
|
|
32.3
|
|
|
15.5
|
|
|
36.0
|
|
|
Reversal of accrued
tax contingency
|
—
|
|
|
(8.1)
|
|
|
—
|
|
|
(8.1)
|
|
|
Adjusted operating
income before depreciation and
amortization
|
$
|
3.1
|
|
|
$
|
24.2
|
|
|
$
|
15.5
|
|
|
$
|
27.9
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber
units
|
|
|
|
|
|
|
|
|
iDEN
|
563.3
|
|
|
1,127.8
|
|
|
|
|
|
|
WCDMA
|
2,864.8
|
|
|
2,717.1
|
|
|
|
|
|
|
Total
subscriber units in commercial service (as of June
30)
|
3,428.1
|
|
|
3,844.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN net subscriber
losses
|
(103.5)
|
|
|
(149.7)
|
|
|
|
|
|
|
WCDMA net subscriber
losses
|
(29.3)
|
|
|
(29.2)
|
|
|
|
|
|
|
Total
net subscriber losses
|
(132.8)
|
|
|
(178.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
19.5
|
|
|
37.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN subscriber
churn
|
5.88
|
%
|
|
4.46
|
%
|
|
|
|
|
|
WCDMA subscriber
churn
|
3.53
|
%
|
|
3.78
|
%
|
|
|
|
|
|
Churn
(%)
|
3.95
|
%
|
|
3.99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
(1)
|
$
|
19
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPGA
(1)
|
$
|
103
|
|
|
$
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CCPU
(1)
|
$
|
18
|
|
|
$
|
16
|
|
|
|
|
|
|
|
(1) For
information regarding ARPU, CPGA and CCPU, see "Non-GAAP
Reconciliations for the Three and Six Months Ended June 30, 2017
and 2016" included
in this release.
|
NON-GAAP RECONCILIATIONS
FOR
THE THREE AND SIX MONTHS ENDED JUNE 30,
2017 AND 2016
(UNAUDITED)
Consolidated OIBDA and Consolidated Adjusted OIBDA
Consolidated operating income before depreciation and
amortization, or OIBDA, represents operating income before
depreciation and amortization expense. Consolidated adjusted
operating income before depreciation and amortization, or adjusted
OIBDA, represents consolidated operating income before depreciation
expense, amortization expense, material asset impairments,
severance costs associated with publicly announced restructuring
plans and other material non-recurring or unusual charges.
Consolidated OIBDA and consolidated adjusted OIBDA are not
measurements under accounting principles generally accepted in
the United States, may not be
similar to consolidated OIBDA and consolidated adjusted OIBDA
measures of other companies and should be considered in addition
to, but not as substitutes for, the information contained in our
statements of operations. We believe that consolidated OIBDA and
consolidated adjusted OIBDA provide useful information to investors
because they are indicators of our operating performance,
especially in a capital intensive industry such as ours, since they
exclude items that are not directly attributable to ongoing
business operations. Consolidated OIBDA and consolidated adjusted
OIBDA can be reconciled to our consolidated statements of
operations as follows (in millions):
NII Holdings,
Inc
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Consolidated
operating loss
|
$
|
(68.9)
|
|
|
$
|
(28.8)
|
|
|
$
|
(148.8)
|
|
|
$
|
(82.8)
|
|
Consolidated
depreciation
|
5.7
|
|
|
29.7
|
|
|
14.6
|
|
|
59.8
|
|
Consolidated
amortization
|
3.6
|
|
|
11.0
|
|
|
7.7
|
|
|
21.0
|
|
Consolidated
OIBDA
|
(59.6)
|
|
|
11.9
|
|
|
(126.5)
|
|
|
(2.0)
|
|
Reversal of accrued
tax contingency
|
—
|
|
|
(8.1)
|
|
|
—
|
|
|
(8.1)
|
|
Asset impairment
charges
|
0.2
|
|
|
7.3
|
|
|
68.6
|
|
|
8.2
|
|
Restructuring
charges
|
54.0
|
|
|
3.3
|
|
|
57.6
|
|
|
8.3
|
|
Consolidated adjusted
OIBDA
|
$
|
(5.4)
|
|
|
$
|
14.4
|
|
|
$
|
(0.3)
|
|
|
$
|
6.4
|
|
|
|
|
|
|
|
|
|
Average Monthly Revenue Per Handset/Unit in Service
(ARPU)
Average monthly revenue per subscriber unit in service, or ARPU,
is an industry term that measures service revenues, which we refer
to as subscriber revenues, per period from our customers divided by
the weighted average number of subscriber units in commercial
service during that period. ARPU is not a measurement under
accounting principles generally accepted in the United States, may not be similar to ARPU
measures of other companies and should be considered in addition,
but not as a substitute for, the information contained in our
statements of operations. We believe that ARPU provides
useful information concerning the appeal of our rate plans and
service offerings and our performance in attracting and retaining
high value customers. Other revenue includes revenues for
such services as roaming, handset maintenance, cancellation fees,
analog and other. ARPU can be calculated as follows (in
millions, except ARPU):
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
US$
|
|
Service and other
revenues
|
$
|
220.1
|
|
|
$
|
243.1
|
|
|
Less: other
revenues
|
(15.8)
|
|
|
(22.1)
|
|
|
Total subscriber
revenues
|
$
|
204.3
|
|
|
$
|
221.0
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
19
|
|
|
$
|
19
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
21
|
|
|
$
|
21
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
BRL
R$
|
|
Service and other
revenues
|
$
|
707.1
|
|
|
$
|
853.0
|
|
|
Less: other
revenues
|
(50.5)
|
|
|
(77.6)
|
|
|
Total subscriber
revenues
|
$
|
656.6
|
|
|
$
|
775.4
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
62
|
|
|
$
|
66
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
67
|
|
|
$
|
72
|
|
|
|
|
|
|
|
Cost per Gross Add (CPGA)
Cost per gross add, or CPGA, is an industry term that is
calculated by dividing our selling, marketing and handset and
accessory subsidy costs, excluding costs unrelated to initial
customer acquisition, by our new subscribers during the period, or
gross adds. CPGA is not a measurement under accounting
principles generally accepted in the
United States, may not be similar to CPGA measures of other
companies and should be considered in addition, but not as a
substitute for, the information contained in our statements of
operations. We believe CPGA is a measure of the relative cost
of customer acquisition. CPGA can be calculated as follows
(in millions, except CPGA):
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
US$
|
|
Consolidated handset
and accessory revenues
|
$
|
5.0
|
|
|
$
|
6.1
|
|
|
Less: consolidated
uninsured handset replacement revenues
|
—
|
|
|
—
|
|
|
Consolidated handset
and accessory revenues, net
|
5.0
|
|
|
6.1
|
|
|
Less: consolidated
cost of handsets and accessories
|
13.0
|
|
|
8.9
|
|
|
Consolidated handset subsidy costs
|
8.0
|
|
|
2.8
|
|
|
Consolidated selling
and marketing
|
23.4
|
|
|
28.0
|
|
|
Costs per statement
of operations
|
31.4
|
|
|
30.8
|
|
|
Less: consolidated
costs unrelated to initial customer
acquisition
|
(2.3)
|
|
|
(1.7)
|
|
|
Customer acquisition costs
|
$
|
29.1
|
|
|
$
|
29.1
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
103
|
|
|
$
|
99
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
BRL
R$
|
|
Consolidated handset
and accessory revenues
|
$
|
16.3
|
|
|
$
|
21.4
|
|
|
Less: consolidated
uninsured handset replacement revenues
|
(0.2)
|
|
|
(0.1)
|
|
|
Consolidated handset
and accessory revenues, net
|
16.1
|
|
|
21.3
|
|
|
Less: consolidated
cost of handsets and accessories
|
42.0
|
|
|
31.5
|
|
|
Consolidated handset subsidy costs
|
25.9
|
|
|
10.2
|
|
|
Consolidated selling
and marketing
|
75.0
|
|
|
97.9
|
|
|
Costs per statement
of operations
|
100.9
|
|
|
108.1
|
|
|
Less: consolidated
costs unrelated to initial customer
acquisition
|
(7.4)
|
|
|
(6.1)
|
|
|
Customer acquisition costs
|
$
|
93.5
|
|
|
$
|
102.0
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
331
|
|
|
$
|
349
|
|
|
|
|
|
|
|
Cash Cost per Handset/User
Cash cost per handset/unit, or CCPU, represents the sum of cost
of service, general and administrative expenses and customer
retention and other costs divided by average handsets in service
during the period and divided by the number of months in the
period. CCPU is not a measurement under accounting principles
generally accepted in the United
States, may not be similar to CCPU measures of other
companies and should not be considered in addition to, but not as a
substitute for, the information contained in our statements of
operations. We believe CCPU is a measure of the recurring
costs we incur on a monthly basis to provide service to our
subscribers. The CCPU calculation excludes material asset
impairments, severance costs associated with publicly announced
restructuring plans and other material non-recurring or unusual
charges and is calculated as follows (in thousands, except
CCPU):
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
US$
|
|
Total selling,
general and administrative expenses
|
$
|
121.1
|
|
|
$
|
126.1
|
|
|
Less: selling and
marketing expenses
|
(23.4)
|
|
|
(28.0)
|
|
|
General and
administrative expenses
|
97.7
|
|
|
98.1
|
|
|
Cost of
service
|
87.9
|
|
|
90.0
|
|
|
Customer retention
costs and other
|
2.3
|
|
|
1.7
|
|
|
Total
|
$
|
187.9
|
|
|
$
|
189.8
|
|
|
|
|
|
|
|
Cash Cost per
User
|
$
|
18
|
|
|
$
|
16
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
BRL
R$
|
|
Total selling,
general and administrative expenses
|
$
|
388.7
|
|
|
$
|
442.3
|
|
|
Less: selling and
marketing expenses
|
(75.0)
|
|
|
(97.9)
|
|
|
General and
administrative expenses
|
313.7
|
|
|
344.4
|
|
|
Cost of
service
|
281.5
|
|
|
316.2
|
|
|
Customer retention
costs and other
|
7.4
|
|
|
6.1
|
|
|
Total
|
$
|
602.6
|
|
|
$
|
666.7
|
|
|
|
|
|
|
|
Cash Cost per
User
|
$
|
57
|
|
|
$
|
56
|
|
|
|
|
|
|
|
Impact of Foreign Currency Fluctuations
The following table shows the impact of changes in foreign
currency exchange rates on certain financial measures for the three
and six months ended June 30, 2016
compared to the same period in 2017 by (i) adjusting the relevant
measures for the three and six months ended June 30, 2016 to levels that would have resulted
if the average foreign currency exchange rates for the three and
six months ended June 30, 2016 were
the same as the average foreign currency exchange rates that were
in effect for the three and six months ended June 30, 2017; and (ii) comparing the actual and
adjusted financial measures for the three and six months ended
June 30, 2016 to the similar
financial measures for the three and six months ended June 30, 2017 to show the percentage change in
those measures before and after taking those adjustments into
account. The amounts reflected in the following table for operating
income before depreciation and amortization on a consolidated basis
and segment earnings for Nextel Brazil, before the adjustments for
changes in foreign currency exchange rates, are based on the
calculations contained elsewhere in these non-GAAP reconciliations
for the three and six months ended June 30,
2017 and 2016. The average foreign currency exchange rates
for each of the relevant currencies during each of the three and
six months ended June 30, 2017 and
2016 are included in the notes to the table below. The information
reflected in the following table is not a measurement under
accounting principles generally accepted in the United States and should be considered in
addition to, but not as a substitute for, the information contained
in our statements of operations. We believe that these calculations
provide useful information concerning our relative performance for
the three and six months ended June 30,
2017 compared to the same period in 2016 by removing the
impact of the significant difference in the average foreign
currency exchange rates in effect for those periods.
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2Q 2016
Actual
|
2Q 2016
Adjustment
(1)
|
2Q 2016
Normalized
(1)
|
|
2Q 2017
Actual
|
2Q
2016
to 2Q
2017
Actual B(W)
Growth (2)
|
2Q
2016
to 2Q
2017
Normalized
B(W) Growth
(3)
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
249,213
|
|
$
|
23,287
|
|
$
|
272,500
|
|
|
$
|
225,134
|
|
(10)%
|
(17)%
|
Adjusted
operating income (loss)
before depreciation and
amortization
|
14,387
|
|
2,254
|
|
16,641
|
|
|
(5,361)
|
|
(137)%
|
(132)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
249,168
|
|
$
|
23,287
|
|
$
|
272,455
|
|
|
$
|
225,105
|
|
(10)%
|
(17)%
|
Adjusted
OIBDA
|
24,123
|
|
2,254
|
|
26,377
|
|
|
3,080
|
|
(87)%
|
(88)%
|
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
YTD 2016
Actual
|
YTD 2016
Adjustment
(1)
|
YTD 2016
Normalized
(1)
|
|
YTD 2017
Actual
|
YTD
2016
to YTD
2017
B(W) Growth
(2)
|
YTD
2016
to YTD
2017
Normalized
B(W)
Growth (3)
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
475,770
|
|
$
|
81,029
|
|
$
|
556,799
|
|
|
$
|
476,089
|
|
—
|
(14)%
|
Adjusted
operating income (loss)
before depreciation and
amortization
|
6,343
|
|
4,750
|
|
11,093
|
|
|
(246)
|
|
(104)%
|
(102)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
475,671
|
|
$
|
81,029
|
|
$
|
556,700
|
|
|
$
|
476,030
|
|
—
|
(14)%
|
Adjusted
OIBDA
|
27,883
|
|
4,750
|
|
32,633
|
|
|
15,453
|
|
(45)%
|
(53)%
|
(1) The "2Q 2016
Normalized" and "YTD 2016 Normalized" amounts reflect the
impact of applying the average
foreign currency
exchange rates for the three and six months ended June 30,
2017 to the operating revenues
earned in foreign
currencies and to the other components of each of the actual
financial measures shown
above for the
three and six months ended June 30, 2016, other than certain
components of those measures
consisting of U.S.
dollar-based operating expenses, which were not adjusted. The
amounts included under the
columns "2Q 2016
Normalized" and "YTD 2016 Normalized" reflect the amount determined
by adding the "2Q
2016 Adjustment"
and "YTD 2016 Adjustment" amounts calculated as described in the
preceding sentence to
the "2Q 2016
Actual" and "YTD 2016 Actual" amounts and reflect the impact of the
year-over-year change in the
average foreign
currency exchange rates on each of the financial measures for the
three and six months ended
June 30, 2017. The
average foreign currency exchange rates for each of the relevant
currencies during the three
and six months
ended June 30, 2017 and 2016 for purposes of these calculations
were as follows:
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Brazilian
real
|
3.21
|
|
3.51
|
|
3.17
|
|
3.71
|
|
|
|
(2) The percentage amounts in
these columns reflect the better, or B, or worse, or W, growth
rates for each of the
financial measures
comparing the amounts in the "2Q 2017 Actual" and "YTD 2017 Actual"
columns with those in
the "2Q 2016
Actual" and "YTD 2016 Actual" columns.
|
(3) The percentage amounts in
these columns reflect the the better, or B, or worse, or W,
growth rates for each of the
financial measures
comparing the amounts in the "2Q 2017 Actual" and "YTD 2017 Actual"
columns with those in the
"2Q 2016
Normalized" and "YTD 2016 Normalized" columns.
|
Operational Free Cash Burn
Operational free cash burn is an industry term that represents
all of the Company's cash spending, with the exception of payments
related to debt principal and interest, cash returned from escrow
in connection with the sale of Nextel Mexico and cash recovered
from certain performance bonds relating to the Company's
obligations to deploy its WCDMA spectrum in Brazil. Operational free cash burn is not
derived from or based on any measurement under accounting
principles generally accepted in the
United States but is instead calculated through the
Company's cash forecasting process. For this reason, we believe
that it would require unreasonable efforts to provide a
quantitative reconciliation of this term.
View original
content:http://www.prnewswire.com/news-releases/nii-holdings-reports-2017-second-quarter-results-300501695.html
SOURCE NII Holdings, Inc.